ForteBank
ForteBank neatly encapsulates the ambition of Kazakhstan’s banking sector. It has pushed hard into digital, launching its own online marketplace. It is putting serious effort into expanding its lending to small and medium-sized enterprises. It has used acquisitions to increase its asset base and boost its technology. It is far from the only bank in the country to have such widespread ambitions but, under the stewardship of chief executive Guram Andronikashvili, it has managed to stay a step ahead of the competition.
The modern incarnation of the bank came about in 2015, following a recapitalization and merger with AllianceBank and TemirBank, two state-owned lenders. It has since won approval to acquire Bank Kassa Nova. But the more important acquisition may prove to be the takeover in 2019 of One Technologies, which gave ForteBank a leg-up on the competition by bringing in-house a tech company that was formed outside the staid halls of finance.
That points to a big part of ForteBank’s growth plan. Andronikashvili sees technology as a crucial driver of future growth. He has clearly learned lessons from Kaspi, a corporate bank-turned-fintech. Like Kaspi, ForteBank has launched its own marketplace, an Alibaba-style online store where use of ForteBank products is optional but clearly convenient.
Unlike Kaspi and many other rivals, ForteBank is focused on the middle market, eschewing the opportunities for micro-lending to a swathe of customers to instead concentrate on Kazakhstan’s emerging middle class.
Executives in the country admit that private banking has yet to take hold, but ForteBank is arguably as close as it gets.
By the end of September, ForteBank’s assets had grown 5.3%, the same rate as Kaspi and behind only Halyk Bank among the country’s 10 biggest lenders. That growth rate has helped ForteBank join the upper echelon of the banking system.
Halyk, which absorbed rival Kazkommertsbank two years ago, is far and away the biggest in the country by assets, but ForteBank is now challenging Sberbank for the number two spot.
The bank has made a push into unsecured retail lending, increasing its portfolio in this segment to KT343.3 billion ($890 million) by the beginning of October, a 22.4% year-on-year rise. This is partly because of its extra reliance on technology: ForteBank introduced a credit-scoring model that has cut the time for loan approvals by two thirds.
ForteBank executives can reel off an impressive list of initiatives aimed at making things easier for their clients: the ability to accept payments by QR code; the introduction of Apple Pay; the ForteKassa point of sale terminals; and an e-money partnership with KaR-Tel, a local telecommunications company. This appears to be just the beginning of the digital transformation enabled by the purchase of One Technologies.
ForteBank managers have created an institution that is proving flexible enough to respond to the rapid changes takingplace in Kazakhstan’s banking system, in particular the growing importance of digital banking. They have also shown their ability to spot a good deal and make cultures mesh after acquisitions. Forte may not be the biggest bank in the country, but during our awards period, it was the best.